Reference no: EM133604291

Question: Another reason many chip companies do not manufacture chips and instead use TSMC is that TSMC can use the same fab to make millions of chips for many different companies, as a result its costs to make chips will be lower. This is another example of an administrative cost that chip companies such as Apple cannot overcome, this is an example of: flexibility, managing strategically different businesses, develop distinctive capabilities, the incentive problem, competitive effects, differences in optimal scale in different stages of production, compounding risk